Summary
- Reddit shows strong user growth, especially internationally, driven by features like auto-translation and unique content formats such as AMAs.
- RDDT’s international average revenue per user lags U.S. levels, with monetization and ad targeting notably behind Meta’s $14.46 ARPU versus Reddit’s $5.04.
- Effective international monetization and improved ad relevance are critical for RDDT’s future margin expa…
Summary
- Reddit shows strong user growth, especially internationally, driven by features like auto-translation and unique content formats such as AMAs.
- RDDT’s international average revenue per user lags U.S. levels, with monetization and ad targeting notably behind Meta’s $14.46 ARPU versus Reddit’s $5.04.
- Effective international monetization and improved ad relevance are critical for RDDT’s future margin expansion and revenue growth.
- Data licensing, leveraging Reddit’s vast user-generated content, is emerging as a promising revenue stream, though content quality for AI training remains a concern.
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The Reddit Investment Thesis
Reddit, Inc. (RDDT) (RDDT:CA) is a unique asset and the next evolution of the formerly popular internet forums. I used to spend a lot of time in
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Quick Insights
International user growth is robust, but lower ARPU and weaker margins compared to U.S. users mean future revenue growth depends on improved international monetization.
RDDT’s ad targeting is less advanced than Meta’s, resulting in less relevant ads and a significantly lower ARPU, but enhancing ad relevance could unlock substantial upside.
Data licensing is positioned to become a significant revenue stream, leveraging Reddit’s user-generated content for AI training, though content quality and accuracy require careful management.